We have so much working in our favor and those are the things we focus on. Optimism, after all, is an invaluable competency for anyone trying to turn a new idea into a company. Sometimes, however, we can’t ignore the reality that we are swimming against the current.
Grocery stores are packed with big national brands. Next time you’re walking down the snack aisle try to spot a local brand, or even a brand that is only sold at that store. You’re probably not going to find either. It’s less like, say, iTunes and a lot more like the Top 40. We all enjoy familiarity, but that’s not what’s driving this lack of diversity. There is a reason, and it’s not the grocers fault.
Packaged food is an industry based on scale. How about an example: Kettle Foods makes incredibly good chips. Every month they sell roughly 10 million bags of those chips (a couple go in our cart). That’s a few hundred times more than the popcorn boxes that we make/sell per month. Ten times is a huge different, a few hundred times is nuts. The difference between us is roughly equal to the difference between my height and the height of the Empire State Building. No joke.
Scale is one of our fundamental challenges. All of the other products on the shelf in our aisle enjoy the benefits that come with making a whole lot of something. This allows them to negotiate and contract rates for core ingredients like corn. The team and equipment used to make their product are dialed in, and running around the clock. Suppliers fight for their business. When they order ingredients, they order rail cars full. They are in a different league.
We beg suppliers. As much as we have grown, we are still nowhere near a priority. When we get a deal it’s because of a good relationship and basic kindness. Most of the time, however, the inefficiency of being small means things take longer and cost more.
We don’t lust for brag worthy sales figures. We don’t daydream about being a ginormous company. We are learning, however, that it’s all but impossible to be small and live on the mainstream grocery store shelf. The products sitting to the left and right of our box were bred in an ultra competitive landscape where price is a key evolutionary force. This is the reason grocery shelves are all packed with the same products made by the same few giant brands. Consumers expect the price that scale allows.
We are outgunned in every measurable way. The thing is, this is just the crux of starting a food company. It’s a tough test, but it’s also our training ground. To grow now is a prelude to thriving once the playing field is level. Moving forward must mean we are making good stuff!
So, you will pay more when you choose to buy something from an interesting independent brand, but you are also reshaping the landscape of our food system.